Dungeons of Dredmor - On the Folly of Giving Money Directly to Developers

July 1st, 2011, 02:37

Gaslamp has a FAQ titled On the Folly of Giving Money Directly to Developers, which covers various question such as why the game is a Steam exclusive (it isn't - others are coming after the Steam release) and why they aren't distributing directly. In essence, they believe the safety of a good distribution deal outweighs losing a cut of the sales. A late snip:

The next best alternative is that we set ourselves up with a credit card processor and run our own storefront-based, money-taking web-solution. This assumes you have a credit card, which can also be a bit iffy in this day and age. It also exposes us to the problems associated with running an in-house electronic commerce system; we have to build a system that is secure enough that you feel comfortable giving us your credit card number, and we also have to ensure that it is secure enough from our end that the money ends up in our bank account and not sent to the First International Bank of Lulzsec. Again, if anything goes wrong, it could destroy Gaslamp. Writing your own software solutions for these things is dangerous; again, look at Project Zomboid, who built a clever cloud-based updater system only to realize that pirated copies were slowly bankrupting them. We donít want to be in that situation, which is why weíre using third-party publishers and distributors.
A final option is something like BT Micro; a service that handles all the credit card processing and transactional downloading for you. This isnít a bad idea, although it does leave the problem of providing you with updates.
Anyhow, thatís our thought process. For those of you who want to give us money directly Ė we love you, but we really, really canít take it. I hate to say it, but waking up and knowing that you still have a company in the morning and that your accounts havenít been frozen is worth a slice of your revenue stream.

I really like these guys, but they are pretty naive about the options available to them. With all the work they put into making the game, you'd think they'd have done a bit more research on the distribution side. Granted, getting a Steam deal on a game like this is awesome, and they aren't the first or last developers to assume that's they've got it made and their problems are all solved. But for the very reasons they are citing, I wouldn't want to make my company dependent upon one source of revenue. And - seriously - worrying about what troubles they might experience if they enjoy Notch-like success and get too much money coming in is just plain silly.

I'm reminded of Flagship and its launch-day debacle blues w/ Hellgate. If these guys are more comfortable with a known entity distributing their product, more power to 'em - it leaves them more time to fix bugs with the game instead of bugs with their payment processing.

I have no problems with the choices they made. It makes sense and minimises risk and more importantly in this scenario, unnecessary overhead.

As a consumer, I prefer my products in a digital distribution platform as well. It's good to keep everything in one place. As someone who has bought from many independent developer sites in the past, I have misplaced my registration details on more than one occasion.

Originally Posted by RampantCoyote
And - seriously - worrying about what troubles they might experience if they enjoy Notch-like success and get too much money coming in is just plain silly.

Agreed, but Steam will undoubtedly give them massively more exposure than any other option, so I still think it makes sense to focus on that for now. Those who dislike Steam will have other options down the track.

I do I think that Nicholas doesn't need to just justify why it's on Steam first though. It's his baby and he is the one taking all the risks. He should just say that it will be available elsewhere at a later date and leave it at that.

Of course nothing has to be justified. It's great the game is on Steam.

Originally Posted by Dhruin
Agreed, but Steam will undoubtedly give them massively more exposure than any other option, so I still think it makes sense to focus on that for now.

Yes, certainly makes sense for now.

Originally Posted by Scrav
I have no problems with the choices they made. It makes sense and minimises risk and more importantly in this scenario, unnecessary overhead.

But if they decide against selling directly they're exchanging one (perceived) risk by another which might be far bigger in the long term:
Their business success is 100% tied to their distribution partners - but their partners aren't invested in the game. Selling this very game is probably of relatively low priority for them, and they really don't give a damn about Gaslamp's business success. Which is only natural because their goals as a distributor are different to Gaslamp's as developer.

Anecdotal evidence (blogposts by other developers, etc.) makes me believe that getting past the Steam gatekeeper as an indie is like a rigged lotterie. You either have connections or you need a lot of luck. Even a well known indie like Positech Games only managed to sneak one game into Steam, all others were rejected. Jeff Vogel's Avadon was rejected too.

So what happens if Steam and a couple of other distributors decide to pass on the next game?
In that case Gaslamp will be caught with their pants down. No independent high margin sales channel, no customer data for the mailing list.
So direct sales are sort of a safety net.

Originally Posted by Gorath
So what happens if Steam and a couple of other distributors decide to pass on the next game?
In that case Gaslamp will be caught with their pants down. No independent high margin sales channel, no customer data for the mailing list.
So direct sales are sort of a safety net.

So I'm not sure they made the less risky choice.

Couldn't have said it better myself. Just look at what happened with Steven Peeler's games. Steam accepted Depth's of Peril, but Kivi's Underworld and Din's Curse are nowhere to be seen. They gave him absolutely no reason as to why they were rejected, so he can't fix what they perceive as a problem. That's standard policy, but you would think that if they had one of Soldak's games up on Steam then they would have the others as well. Especially Din's Curse.

Originally Posted by Gorath
But if they decide against selling directly they're exchanging one (perceived) risk by another which might be far bigger in the long term:
Their business success is 100% tied to their distribution partners - but their partners aren't invested in the game. Selling this very game is probably of relatively low priority for them, and they really don't give a damn about Gaslamp's business success. Which is only natural because their goals as a distributor are different to Gaslamp's as developer.

Anecdotal evidence (blogposts by other developers, etc.) makes me believe that getting past the Steam gatekeeper as an indie is like a rigged lotterie. You either have connections or you need a lot of luck. Even a well known indie like Positech Games only managed to sneak one game into Steam, all others were rejected. Jeff Vogel's Avadon was rejected too.

So what happens if Steam and a couple of other distributors decide to pass on the next game?
In that case Gaslamp will be caught with their pants down. No independent high margin sales channel, no customer data for the mailing list.
So direct sales are sort of a safety net.

So I'm not sure they made the less risky choice.

I haven't read developer blogs on Steam, but it appears to be me that Indie games on Steam have a certain level of polish to them. It doesn't surprise me at all that Vogel's games wouldn't make the cut as they look old and outdated.

Steam may have a high criteria for entry, but other digital distribution channels don't. Impulse for example has a substantially lower standard for taking on games.

If there is money to be made, there will be digital distributors available.

Originally Posted by Scrav
I haven't read developer blogs on Steam, but it appears to be me that Indie games on Steam have a certain level of polish to them. It doesn't surprise me at all that Vogel's games wouldn't make the cut as they look old and outdated.

Steam may have a high criteria for entry, but other digital distribution channels don't. Impulse for example has a substantially lower standard for taking on games.

If there is money to be made, there will be digital distributors available.

From what I've read it doesn't work like that.

Steam has (had) only one criterion:
The gatekeeper (at that time really only one person!, no idea if this changed) likes your game - or he doesn't. In that case you get a standard email with a rejection, if you get an answer at all.

Originally Posted by skavenhorde
Just look at what happened with Steven Peeler's games. Steam accepted Depth's of Peril, but Kivi's Underworld and Din's Curse are nowhere to be seen. They gave him absolutely no reason as to why they were rejected, so he can't fix what they perceive as a problem. That's standard policy, but you would think that if they had one of Soldak's games up on Steam then they would have the others as well. Especially Din's Curse.

Yes, it's a pity.

Just a guess, but maybe Depths of Peril's sales numbers were too low for Valve's taste. It's possible that below a revenue of XXXXXX it's simply not worth it and they believe their resources are better spent on other games.

I doubt it's common to have a first like this be a truly profitable venture, regardless of what you do.

To "limit" themselves like this might not be "wise" in this one-game scenario, but if they manage to build a reputation and establish themselves, it's better to do it like this when the risks are minimal.

However, I probably wouldn't do it like that myself.

Given the early stage of my game, I haven't given it enough thought - but I certainly plan to handle this with direct control. Establish a webpage - probably with someone else handling the transactions, which is costly but a LOT more convenient I expect.

DArtagnan

Gotta echo what Rampant said. The 3rd party credit card handlers are pretty easy to use, from what I understand. You don't have to 'build the system', BT Micro and co handle all that for you, you just embed some of their code that transfers a customer to their site. All the security and so on is handled by them.

They also have control panels for tracking details. I don't know offhand, but it might be possible to keep the details of anyone who has purchased so you can send them updates. Or just release patches stand-alone, not sure I see the problem.

Not to suggest that the DoD dudes are dishonest, but reading between the lines I think they just don't have the time and energy to implement their own sales solutions. What Gorath said about Steam refusing to sell future games makes 100% sense. (I also personally just don't use Steam. I also think there's more people not using Steam than not having access to a credit card.) Them turning down Avadon makes sense too, not because it looks "old" but because it lacks polish of any kind whatsoever.

I doubt it's common to have a first like this be a truly profitable venture, regardless of what you do.

I'd qualify that with Unless you get published on Steam. I think it would be mighty uncommon for a game that gets on Steam to not turn a profit.

DArtagnan

Originally Posted by screeg
I'd qualify that with Unless you get published on Steam. I think it would be mighty uncommon for a game that gets on Steam to not turn a profit.

Depends upon their initial investment, but a lot of the games on Steam really don't make all that much money. Probably more than they'd have made selling on their website alone, but not hundreds of thousands of dollars. Again, Steven Peeler's Depths of Peril comes to mind - I have no idea how it did, other than Steam didn't seem too impressed with its sales. Getting on Steam is not an automatic path to security. It's just a lucky break that's likely to get you more exposure (and more sales) than you would have gotten on your own as an indie.

Surely, if they can get on Steam to start with, even given the eyebrow raising aspect of launching right after the big Steam summer sale ends when a great many people casual and otherwise will be rather fund depleted----the likes of Desura, Gamersgate, maybe Impulse, maybe GoG, can follow in due time. But yeah, RampantCoyote and I have been beating the BMT Micro and such drum for awhile now----time'll tell.

I guess if I had to pick a platform, due to not really wanting to have a client running, I'd go with GoG/Gamersgate if more direct Soldak/Arcen'ish stylings just didn't happen.

To start: Gaslamp Games has three founding partners: myself, Nicholas, and Dan. We have different perspectives and disagree on all kinds of things. The perspective in the linked blog post is from Nicholas (who has his own take on everything) and the perspective I'll give now is my own.

What we agreed on from the outset is that we would like to be on Steam. From a business perspective it's undeniably a good idea.

I think screeg hits on some very important points which align more closely with my thoughts than what Nicholas said.

1. Self-distribution takes a lot of effort
Steam handles distribution, payment processing, patch distribution, possibly infrastructure for expansion beta testing, and all sorts of nonsense that would take a lot of effort from us.

Remember: We are just a few guys with almost no money to put in to this and we have to work to pay rent (and Nicholas has a masters degree to finish). We did not start Gaslamp with any significant capital. Heck, when Terraria's dev plugged out site on his twitter, our server got thoroughly crashed - and this is running on a server our web guy, Derek, happens to have (which also ran our beta distribution). He's received no compensation for expenses yet ó none of us have. He's very patient and we're lucky to have his generosity.

2. Steam is a huge market and huge publicity boost
Steam instantly puts our game in front of millions of gamers. There is nothing that can compare. I can't stress this point enough.

Gaslamp Games as an indie developer launching its first title could never attempt this pricing and game design strategy if we weren't launching on Steam ó we'd necessarily have to sell far, far fewer copies at a somewhat higher price and aim toward a niche market that likely would not respond with much enthusiasm. Making a graphical roguelike then selling it to roguelike players who don't care about graphics and get their games for free would be a terrible idea. And the marketing would be a long, hard road from obscurity, besides.

Steam gives us credibility. As people said previously, Steam is a closed and selective service which distributes games that possess a certain level of polish. (To address the Steam-haters: At least that's what it looks like to most people, and that's what is important from a marketing standpoint.)

People know about Steam: if we were just some random web page with a PayPal or BMTmicro account, we'd be facing a much harder sell to customers. If we were on one of the other distributors, whatever their actual qualities are, they are not generally perceived to be at the level that Steam is.

3. We're distributing on other platforms anyway, so hey, whatever!

Those are my thoughts. I don't particularly follow the reasoning Nicholas gave in the linked post, but we've each got our opinion and what is important is that we agree on a strategy forward that involves diversifying the distribution options for people who are interested in buying our game.